Core member of ERC-20 token development team put forth a new strategy to tackle ICO fraudulence and to overcome scams.

31 Oct 2018
2 min read

"You are able to take your funds back at any point in time and do it simply by sending your tokens back.”

Fabian Vogelsteller

As per reports released on 31st Oct by Czech based news portal Kurzy, the co-author and core developer of Ethereum [ETH] - Fabian Vogelsteller announced the commencement of a new model for Initial Coin Offerings [ICOs].

On 30th Ethereum’s Annual Devcon was held in Prague, the core ETH team addressed a new model for the working of ICOs which according to the ERC-20 developer will guard the interest of cryptocurrency investors.

The abstract of the model is acquired from the concept of a ‘Reverse ICO’ which is referred to as “RICO”. The project is a fundraising model that provides the investors with the flexibility of returning their tokens and being reimbursed by the ICO at any given stage of their business. This functionality is planned to be implemented through a special smart contract designed by the team.

Fabian explains how RICO reduces the chances of investors facing illicit consequences of scams as well as motivates the ICO issuers to be at their best and fulfill their due obligations.

Once RICO investors are deposited with tokens they immediately carry the power to return it back to RICO under any circumstance which further will be given out to other investors who require RICO tokens.

It is speculated that although the model will bring in flexibility and assurance for its token investors the funding will undergo fluctuations as the capital would have no stable position in the ICO. To this, Fabian said that startups would require more “core funding" from private investors outside of a public token sale.

Companies opting for token sales are ought to be deviating from Ethereum’s plan of “decentralization” according to Fabian. He further explains how the immense capital collected by companies make them keen on buying “lambos [lamborghini] rather than doing something useful”.

Fabian claimed to feel “obligated to come up with something useful” due to his vital part in the development of the ICO industry.

As per Tropyc’s insight, ICO’s have managed to gain funding over $24 billion and is growing by gradual increases. The fact that cryptocurrency start-ups are unhurt by the bearish attitude of the market, discloses the potential of ICOs in the coming future.